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Monday, December 10, 2012

CGHS Contribution is deductible under Section 80-D


The Central Government Health Scheme (CGHS ) is a medical facility available to serving and retired Government servants. This facility is similar to the facilities available through health insurance policies. Deduction from the total income has now been allowed in respect of any contribution made to CGHS  by including such contribution under the provisions of section 80D. The deduction will be limited to the current aggregate as mentioned in the section.  See para 5.5.6 of Circular No. 8/2012 given below:-

SECTION 192 OF THE INCOME-TAX ACT, 1961 
[DEDUCTION OF TAX AT SOURCE - SALARY - INCOME-TAX DEDUCTION FROM SALARIES UNDER SECTION 192 DURING THE FINANCIAL YEAR 2012-13]




5.5.6 Deduction in respect of for health insurance premia paid, etc. (Section 80D)


Section 80D provides for deduction available for health insurance premia paid, etc. which is calculated as under:

Sl. No.
Persons for whom payment made
Nature of payment
Mode of payment
Allowable Deduction (in Rs.)
1
 Employee or his family
    the whole of the amount paid to effect or to keep in force an insurance on the health of the employee or his family or
   any contribution made to theCGHS  or
   any payment on account of preventive health check-up of the employee or family, [restricted to Rs. 5000/-; cash payment allowed here]
any mode other than cash
Aggregate allowable is Rs. 15,000/{For Senior Citizens it is Rs. 20000/-}.
2
 Parent or Parents of employee
    the whole of the amount paid to effect or keep in force an insurance on the health of the parent or parents of the employee or
    any payment made on account of preventive health check-up of the parent or parents of the employee [restricted to Rs. 5000/-; cash payment allowed here]
any mode other than cash
 Aggregate allowable is Rs. 15,000/ than {For Senior cash Citizens it is Rs. 20000/-}


Here
 (i) "family" means the spouse and dependent children of the employee.
(ii) Senior citizen" means an individual resident in India who is of the age of sixty years {For AY 2013-14 onwards] or more at any time during the relevant previous year.

The DDO must ensure that the medical insurance referred to above shall be in accordance with a scheme made in this behalf by-
(a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalization) Act, 1972 (57 of 1972) and approved by the Central Government in this behalf; or
(b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999(41 of 1999).


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